British fintech start-up Bud said Monday that it had secured $20 million in a funding round co-led by HSBC and Goldman Sachs.
The London-based company’s platform lets banks update their apps to give users access to financial services products from rivals. Banks can also categorize a customer’s spending data using Bud’s technology to help them find more cost-efficient products.
Its offering is part of an emerging theme in the world of fintech known as “open banking,” which essentially means banks sharing their customer data with third-party providers to enable them to create new financial products.
Proponents of open banking say that it will increase competition in the industry and benefit consumers, giving them more choice over who they bank with.
Ed Maslaveckas, Bud’s co-founder and chief executive, said in an interview that the sector has seen a “massive shift” from a focus on competitive rates and services to a digital-oriented customer experience and a “marketplace” banking model.
“The market dynamic is such that open banking is a much bigger change for banks than I think people realize,” he told CNBC. “Open banking essentially allows the customer to get their banking data and make payments from any app or service of their choosing.”
Bud’s Series A funding round — an early-stage investment — also got backing from other big lenders including Australia’s ANZ, South Africa’s Investec and Spain’s Banco Sabadell. Investec invested through its venture fund INVC while Banco Sabadell participated via its venture arm InnoCells.